• How High US Corporate Tax Rates Hurt the Economy

    The US corporate tax rate is the highest among developed nations at 35% at the federal level. Tack on state and local taxes, which can add 5-7%, and US corporations are looking at a 40%-42% income tax burden. But the US takes it even another step further, unlike any other country in the developed world.

    Uncle Sam demands that American companies with offshore operations pay US taxes on all income earned abroad – if those profits are repatriated to the US – even though taxes have already been paid to the countries where the income was actually generated. Think of it as double taxation on profits.

    No wonder then that more and more US corporations with offshore operations are keeping those profits outside the US in order to avoid this double taxation. It is estimated that up to $2 trillion of those foreign profits are parked outside the US. That is a ton of money which, if brought home, could result in lots of new projects that could create many new jobs.

    With an obligation to their shareholders to maximize profits, large US corporations are increasingly taking additional steps to minimize taxes owed to the Treasury in a process that has been coined “tax inversion” as I will explain below. This involves US firms moving their corporate headquarters overseas to countries where the tax burden is lower.

    Today, we’ll explore how the extraordinarily high US corporate tax rate hurts the economy and why more and more large American corporations are moving their headquarters offshore. And we’ll look at why the Obama administration is trying to stop it – when all it would take to fix it is the US lowering its tax burden to a more reasonable level. But no, Obama wants to raise corporate taxes even more. This should make for an interesting E-letter.

    But before we get into that discussion, let’s take a quick look at last Friday’s third and final report on 2Q Gross Domestic Product.

    Posted to Forecasts & Trends by Gary D. Halbert on 09-30-2014
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  • 2 Ways to Write the IRS Out of Your Will

    You can protect your money many different ways. Investors (including me) can focus so hard on protecting their portfolios that they sometimes overlook a costlier potential danger … That is, the confiscation of everything you've worked for,...
    Posted to Uncommon Wisdom by Tony Sagami on 09-30-2014
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  • ObamaCare Architect: 75 Years is Long Enough to Live

    Most Americans probably never heard of or don’t remember the name Dr. Ezekiel Emanuel . He was one of the chief architects of The Patient Protection and Affordable Care Act (“ObamaCare”) from the very beginning. If you remember his name...
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  • Everything You Need to Know About the S&P Until Christmas

    By Andrey Dashkov When I need to clear my mind, I put on my beat-up Saucony sneakers and drive to nearby Deer Lake Park in Burnaby, British Columbia. After a couple of miles, though, as my body gets into a rhythm, my mind wanders back to the thought that...
    Posted to Casey Research by Doug Casey on 09-30-2014
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  • Eurozone Inflation Falls To .3%...

    In This Issue.

    * Dollar is back in charge.

    * Euro gets whacked on inflation news .

    * Is Commodity Bull Run over?.

    * Bears Stearns revisited.

    Posted to Daily Pfennig by Chuck Butler on 09-30-2014
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  • The End of Monetary Policy

    What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of postwar history, but the end of history as such: that is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government. This is not to say that there will no longer be events to fill the pages of Foreign Affairs' yearly summaries of international relations, for the victory of liberalism has occurred primarily in the realm of ideas or consciousness and is as yet incomplete in the real or material world. But there are powerful reasons for believing that it is the ideal that will govern the material world in the long run.

    Posted to Thoughts From The Frontline by John Mauldin on 09-29-2014
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  • Future Bull

    In a conversation this morning, I remarked how rapidly things change. It was less than 20 years ago that cutting-edge tech for listening to music was the cassette tape. We blew right past CDs, and now we all consume music from the cloud on our phones. Boom. Almost overnight.

    Posted to John Mauldin's Outside the Box by John Mauldin on 09-25-2014
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  • Fed Forecasts Sub-3% Economy for the Next Three Years

    The Fed’s policy committee announced last Wednesday that it will end its massive QE bond buying program at the end of next month, thus paving the way for the first Fed funds rate increase sometime next year. This was not a surprise. The Fed’s gargantuan balance sheet will peak near $4.5 trillion in Treasury and mortgage-backed bonds at the end of October.

    What was surprising in the Fed’s data release last Wednesday was the downward revisions to its economic forecasts for 2014, 2015 and 2016. Furthermore, in its first-ever forecast for 2017, the Fed expects GDP growth of only 2.3% to 2.5% that year. In the wake of the Fed’s forecast downgrades last week, private economists are revising their estimates lower as well.

    On the bright side, Americans’ combined wealth posted a new high in the 2Q, a development that might shift the economy into a higher gear. The net worth of US households and nonprofit organizations rose about $1.4 trillion between April and June to a record $81.5 trillion, according to a new report released by the Fed last Thursday.

    This Friday, we get the latest estimate of 2Q GDP. In late August, the government estimated that the economy grew by a stronger than expected 4.2% (annual rate) in the 2Q. The pre-report consensus for Friday’s report suggests another jump to 4.6% in the final estimate. Most forecasters attribute the strong 2Q reading to the severe winter weather in the 1Q that pushed many activities into the April-June quarter. In other words, the 2Q was a “catch-up” period, and most economists expect slower growth for the second half of this year.

    Finally, I offer three recommendations to kick-start the economy at the end of today’s E-letter. I trust that most clients and readers would heartily agree with me. Unfortunately, the current occupant of the White House does not.

    Posted to Forecasts & Trends by Gary D. Halbert on 09-23-2014
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  • Leading Sectors Breaking Down – Internet & Social Stocks

    In July I showed talked about the Russell 2K index and how it was underperforming the broad market. I went on to explain what it likely meant was in store for the US stock market this fall. The outlook was negative, just in case you were wondering…...
  • Where’s the Growth?

    It’s been more than five years since the global financial crisis, but developed economies aren’t making much progress. As of today, the United States, Canada, Germany, France, Japan, and the United Kingdom have all regained their pre-crisis peaks in real GDP, but with little else to show for it.

  • Fed – No Interest Rate Hike Anytime Soon

    The Fed’s latest two-day policy meeting that adjourned yesterday was perhaps the most anticipated of the year. Why? Most Fed-watchers believed that the Fed Open Market Committee (FOMC) might drop a hint in its official policy statement about when...
  • How You Can Tell When a Company’s P/E is All Flash

    By Andrey Dashkov College reunions are toxic. Except for the few precious moments of genuine human connection, these parties are nothing but status pageants. Suits and watches are inconspicuously glanced at, vacation photos (carefully selected the night...
    Posted to Casey Research by Doug Casey on 09-19-2014
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  • Scotland Stays...

    In This Issue.

    * Weekly jobs report improves

    * Net Worth on the rise

    * Limited data next week

    * Scottish voters have spoken

    Posted to Daily Pfennig by Chuck Butler on 09-19-2014
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  • Finest Worksong

    I had dinner last night with my good friend Richard Howard, who, besides being a charming young Australian lad, is also the wickedly brilliant chief economist of Hayman Advisors, the hedge fund outfit run by my friend Kyle Bass. We try to get together every few months at one of the local eateries and hash out the world. And yes, for those interested, the recent action in Japan has both of us smiling a “we told you so” sort of smile. But also thinking that the magic will last for Abe-sama a little while longer. Actually, we talked about why this trade could take a lot longer than most yen bears expect.

    Posted to John Mauldin's Outside the Box by John Mauldin on 09-18-2014
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  • Out of Control Federal Regulations Stifle Economy

    Today we focus on the costs to consumers of out-of-control federal regulations. While government regulations have increased for decades, the issuance of such new laws has exploded in recent years under the Obama administration. This regulatory maze is taking a serious toll on the economy, as I will discuss below.

    Most Americans are unaware that the government issued over 3,600 new regulations in fiscal year 2013 alone! Likewise, most of us have no idea that this rising regulatory burden costs the economy up to $2 trillion each year. This is regulatory overkill, and it’s no wonder then that this economic recovery is so weak. That’s our main topic today.

    The Fed Open Market Committee is meeting today and tomorrow, and the focus is on whether the Fed will hint at when it might implement the first interest rate hike in almost eight years. The latest FOMC policy statement will be released tomorrow afternoon, and I will report on it in my blog on Thursday. If you have not subscribed to my free weekly blog, go here (

    Posted to Forecasts & Trends by Gary D. Halbert on 09-16-2014
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